Annamalai's 'Gujarat company' jibe finds resonance in Kerala, reigniting federalism row

Former Bharatiya Janata Party (BJP) Tamil Nadu president K. Annamalai's criticism of the Central government being run like a “Gujarati company” has drawn support from both the ruling Left Democratic Front (LDF) and the opposition United Democratic Front (UDF) in Kerala, with leaders citing widening regional disparities in economic development.

Mr. Annamalai, who quit the BJP in June, had alleged that the party's national leadership was systematically favouring Gujarat, the home State of Prime Minister Narendra Modi and Union Home Minister Amit Shah, by channelling infrastructure projects, fiscal resources and major events to the State. He accused the Centre of abandoning the principles of symmetric federalism. His remarks have struck a chord in Kerala, a State that has long complained of being short-changed in central allocations despite contributing significantly to the national exchequer.

Communist Party of India (Marxist) leader and former Kerala Finance Minister Thomas Isaac said the growing inter-State inequality was “hurting even Modi sympathisers.” He argued that market forces were not the sole cause of the lopsided development pattern. “The Modi dispensation has forced the yawning economic inequality on the federal polity by concentrating infrastructure spending and industrial projects in BJP-ruled States,” Dr. Isaac said. He added that the Centre's approach had undermined the spirit of cooperative federalism enshrined in the Constitution.

Former Kerala Pradesh Congress Committee president Mullappally Ramachandran welcomed Mr. Annamalai's observations, though he clarified that the Congress was not endorsing him politically. “Mr. Modi has undoubtedly fostered a rapidly-widening inequality between BJP and non-BJP-ruled States and fuelled regional disparities. However, the skewed agglomeration of capital and funds in BJP-ruled States has not benefited the common person. Southern States' human development index, health indices and literacy rates far outrank those of Gujarat or Uttar Pradesh, where development solely benefits corporates,” he said.

Congress legislator Sandeep Varier, who left the BJP in 2025, wrote on Facebook that the party's “discrimination against South India was organisational as well as linguistic.” He noted that no South Indian leader had made it into the BJP's national leadership and that pan-Indian laws and public schemes were being named in Hindi, which he described as a subtle imposition of the language. He also pointed out that the BJP's organisational structure remained heavily concentrated in the Hindi heartland, leaving southern States underrepresented.

BJP State general secretary S. Suresh defended the Central government, saying Gujarat and Uttar Pradesh had become investment destinations by cutting red tape and creating business-friendly environments, not because of favouritism. He said BJP-ruled States had benefited from aligning their development priorities with the Central government, furthering the “double-engine government” approach. He dismissed the criticism as a political narrative that would not find resonance among South Indians, and accused the Congress and CPI(M) of attempting to divide the country on regional lines.

The exchange reflects a broader debate over the federal structure, with southern States repeatedly raising concerns about tax devolution and funding patterns. Kerala has been among the vocal critics of the existing fiscal distribution, arguing that States with better social indicators are not adequately compensated. The 15th Finance Commission's terms of reference and the frequent changes in GST compensation have also been points of contention. Mr. Annamalai's remarks, coming from a former BJP president, have given fresh ammunition to parties that have been demanding a more equitable federal arrangement.